Teaching critical thinking to high school students: Economics research/presentation (6.2 of 6)

The following are my teaching assignments on critical thinking for California 12th grade students in the semester-long courses, “US Government” and “Economics.” I offer them for non-profit use:

This is the final action: students explore their interests with research, writing, and presentation to the class. At this point of the course, the previous sections from this article and my sharing of current events have opened students’ minds that the world they thought existed in government and economics was a fairy tale believed by the ignorant. This conclusion is justified from the objective and independently verifiable facts, and young-adult confidence that they really do know some things more powerfully than adults (please recall this fact from when we were their ages).

This last project for student research, writing, and class presentation is divided into four parts:

6.1: Basis in academics and state teaching standards

6.2: Revealing economics history 1

6.3: Revealing economics history 2

6.4: Political economy, the assignment, supporting historical voices

This is 6.2:

4. Introducing economics research: a case study of monetary and credit reform

The purpose of economic research is improved economic policies. This research assignment will improve your skills in research, documentation, and presentation of a topic you find important.

As you know, history in any area helps give depth to present understanding. I document the history and economic mechanics of this case study on monetary and credit reform in good-faith academic effort as objectively factual, comprehensively accurate, and as independently verifiable. I welcome any additions to incomplete factual accounts, and welcome refutation of any factual claims that are not accurate. If anyone can improve upon the following work, I will apologize, make the corrections, and thank the contributors for improving this case study.

Education is committed to comprehensive factual accuracy. I stand for this commitment.

And that said for accuracy: all of us bring unique self-expression to any research and brief for topic selection, facts we find important, and interpretation of the data. Successful researchers bring both powerful accuracy to topics, and virtuous self-expression that motivates their work. I support your experimentation to best discover your most virtuous voice.

To begin, Americans seem to be attracted to well-told history. History (formerly The History Channel) is a top-rated television show (1). Establishing powerful history is a necessary and interesting introduction to research; it demonstrates the topic’s importance and effectively brings an audience up-to-speed to embrace the present. Besides, the last I checked there were no top-rated shows about economics, so perhaps our topic of economics needs augmentation.

The history on monetary and credit reform will be game-changing for you. You will recognize this multi-trillion dollar topic has been neglected by political leadership of both parties, economic journals, and corporate media (including who publishes textbooks).

What is monetary and credit reform? 

Since the 1913 legislation of the Federal Reserve, the US has had a national “debt system;” the Orwellian opposite of a monetary system. What we use for money is created as a debt, with the  consequence of unpayable and increasing aggregate debt. This is a description of the simple mechanics of adding negative numbers. Although it’s taught in every macroeconomics course in structure, the consequences of increasing and unpayable debt are omitted (unpayable because it destroys what is used for money, and eventually the debt becomes tragic-comic in amount).

Among the courses I teach is Advanced Placement Macroeconomics; I regularly interact with up to 2,000 AP teachers from around the world on our listserve. The consensus among AP Econ teachers is that the subject of how credit is created (what we use for money) is particularly challenging. AP teacher training includes the recommendation of teaching this topic with a physical demonstration or other teaching aid (I recommend Paul Grignon’s movie Money as Debt). It is the only curricular topic with such emphasis. I have found that inclusion of the history, and the alternative model of monetary reform to create money debt-free makes this topic relatively easy to command.

And that said, here comes a lot of data, a lot of factual claims, and nearly all of it unreported upon through political leadership, corporate media, and most economics textbooks. The credibility and value of the following is supported by this research recognized by the Claremont Colleges inviting me as one of six international speakers to present monetary and credit reform at their 2012 conference.

Monetary reform creates debt-free money as a public service for the direct payment of public goods and services. This would replace the existing system of creating what we use for money out of debt (2); both from the Federal Reserve issuing credit for US federal debt instruments charged to taxpayers with interest, and private banks issuing credit through fractional reserve lending.

Closely related is credit reform that replaces private bank credit with public credit (and here) (3). This transfers interest payments from private profits to public service.

These accurate definitions, of course, require understanding of their benefits compared with the costs of our existing “debt system” in order to see and feel the trillions of dollars of importance.

What are the benefits of monetary and credit reform?

The benefits include paying the national debt, ending a national debt forever, issuing money and credit for full employment, and optimal infrastructure. The prima facie case of benefits should undergo professional multiple and independent cost-benefit analyses. The facts that a Federal Reserve-type debt-based system causes unpayable debt, unemployment, inflation, and decaying infrastructure (4) is relatively easy to demonstrate.

Debt begone: Monetary reform (5) pays the national debt of over $17 trillion dollars virtually without cost, and ends its gross $400 billion+ annual interest payments. This saves the ~100 million US households an average of ~$170,000 in total debt cost, with ~$4,000 gross annual interest cost. Another way to calculate the savings is to figure those amounts per $50,000 annual household income (for example, if your household earns $100,000/year, you save $300,000 in national debt costs and $8,000 every year in gross interest).

The way the national debt is paid nearly cost-free is to use government-created money to pay the debt securities as they are due instead of what is done today: never pay them and “roll them over” (re-issue the debt to existing owners or issue new debt to pay for redeemed debt instruments) while only paying the interest. What is done today is similar to only paying the interest on a credit card with ever-increasing debt total. The inflationary effect of paying the debt will be counteracted by simultaneously removing private banks’ fractional reserve authority proportional to the payments (increasing banks’ reserve requirements).

When government has authority to transparently create money, a national debt becomes a tragic-comic part of history. Trial and error will inform total money supply, with an option of removing money from the supply through some form of simple taxation. For example, if public credit issues mortgages and credit cards at ~5%, (6) this form of taxation can pay for public goods and services with the ability to raise or lower the interest rate. Again, proposals such as these should be subject to professional and independent cost-benefit analyses.

Full employment, optimal infrastructure, falling prices: Government can become the employer of last resort for hard and soft infrastructure investment. This provides triple benefits for employment, the best infrastructure we can imagine, and falling overall prices to the extent infrastructure investment contributes more economic output relative to costs of inputs. History demonstrates (7) infrastructure investment does reduce overall prices in the current debt-funded model that typically adds ~50% of the projects’ nominal cost to its total cost. Monetary reform with infrastructure means the cost of debt-funding disappears, making this employment even more attractive.

Additional anticipated benefits are reductions of crime and other social costs related to human despair as people see and participate in creating a brighter future for all.

Other likely benefits: Banking and related industries are not the only cartels to be broken. Others include so-called “health insurance” and pharmaceuticals, energy, and war. Among the most stunning areas are the trillions invested and recorded in various government agencies’ Comprehensive Annual Financial Reports (CAFRs). These areas will also release literally trillions into the US economy every year. An excerpt from How an economics teacher presents Occupy’s economic argument, victory: (8)

According to the US Senate Permanent Subcommittee on Investigations report (9), these financial oligarchs’ “trading” in non-wealth producing market derivatives increases the price of gasoline for all Americans somewhere from 33 to 60%. Market analysis in other commodities’ “trading” brings the total cost to American consumers of padded prices over $1 trillion every year. This is an incredible increase of prices to US households of ~$10,000 for every $50,000 of annual income!

… For an example to understand what this (CAFRs) means, the University of California system (UC) had a budget deficit that resulted in thousands of students denied enrollment, thousands of staff laid-off, a 32% tuition raise, and a 10% employee pay-cut with furloughs to reduce education days. The deficit could have been fully-funded with less than one-fifth of one percent (10) of California’s documented investments. And no, the amount required for retiree benefits is only one-half of one percent of the total; that’s the specious and usual “official” lie. The above link will walk you through those trillions, if this is of interest.

The cartels taking billions of our dollars are in many industries. Dr. Marcia Angell, former Editor in Chief of the New England Journal of Medicine and currently a Senior Lecturer at Harvard Medical School documents (11): “The combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses put together ($33.7 billion).”

Importantly, “profit” is distinct from “research” in understanding these figures. This is prima facie evidence of unlawful collusion among a cartel, yet government doesn’t investigate. Dr. Angell concludes (12) that US government will never provide universal health care because both political parties’ “leadership” obeys health insurance companies’ lobbyists rather than legislate for the public good. The lack of health care kills about 45,000 Americans every year according to the recent study championed by Harvard’s Medical School (13). Cost-benefit analyses range between $100 to $300 billion annual cost increase (14) to the US by keeping health care companies between doctors and patients. That is, Americans would collectively save $100 to $300 billion every year with universal health care, no insurance companies, and no administrative red tape.

Ecological and resource-based economies: Monetary and credit reform might be short-lived reforms that bridge into a technological revolution for public goods and services so advanced that money and credit considerations become partially obsolete. Bucky Fuller (15), a personal friend for the last two years of his life, predicted unleashed technology will create competition for part-time public service jobs of what constitutes most “work” today. The Venus Project (16) documents existing technology to free humanity from most “work” of the present in a resource-based economy. Both of these visions transcend current paradigms of money and credit. Both work in harmony with our environment and all Earth’s inhabitants.

The Zeitgeist film series features monetary reform and a resource-based economy with The Venus Project. They estimate over 200 million Internet views of their work (I recommend all their films). We should be aware of emerging opportunities to upgrade our policy interest in monetary and credit reform. For example, energy cartel suppressions over multiple energy sources (17) will change how we view economics and interact with nature.

How can research, education, and civic participation build a brighter economic future?

A critical mass of people are already convinced something is fundamentally wrong with money, even if most individuals cannot articulate facts and solutions. We can empower this movement with facts and solutions. That said, while I encourage good faith advocacy of what we see as objective data and apparent solutions, we should prepare for policy development to have a life of its own.

That’s what democracy looks like.

Your assignment, “The economics of ending poverty,” was a case study on the importance, costs and benefits, and politics of that issue that kills a million children every month from preventable poverty. Our findings of why US “leadership” reject ending poverty are consistent with the testimonies of former IMF Chief Economist Simon Johnson (18), former World Bank Chief Economist and Nobel Prize-winning economist Joseph Stiglitz (19) (and here) (20), former Chief Economist John Perkins, and most effectively shown in a 3-minute video (21) from the group “Renegade Economist” and a 2-minute video (22) of John Perkins: US political and economic leadership prefer to retain an imperialist/Robber Baron mentality and policies to take as much as they can for themselves, say that it’s legal and “good for everybody,” buy media coverage to say the same, and hope they can get away with it. Johnson, Stiglitz, and Perkins have all authored multiple bestselling books to explain and document their findings of how this works.

The point of any expert testimony is not to illicit your belief in those conclusions. It is to provide facts and analysis omitted from most American’s consideration from politicians and media. Its purpose is to empower you to:

  • Allow the facts to lead your analysis of policy; not the rhetoric of politicians and media.
  • Allow the facts of history to provide best context to understand the present.
  • Once you have the most comprehensive set of facts through use of critical thinking skills, to reflect upon the meaning of the data, and discover/develop your unique, powerful, and beautiful voices of citizenry.

As the Romans simply stated in their understanding of law under a constitutional republic (before it devolved into dictatorship and purchased politicians): res ipsa loquitur: the facts tell the story.

With your improved economics and civic competence, you’ll be a natural leader in your community to bring factual consideration to our most important economic issues.

Now that I’ve hopefully accomplished my objective to have you appreciate the potential power of economics research, and open your inquiry with a touch of vitally important and “game-changing” history that’s right there for anyone to verify, let’s move into detailed history of this case study on monetary and credit reform.

5. If monetary/credit reform is such a big deal, why won’t corporate media and textbooks cover it? 

“Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it.”  – George Santayana, The Life of Reason, Vol. 1.

Monetary reform has been an American topic of interest since Benjamin Franklin wrote how it allows a government to operate nearly tax-free. Monetary reform has been a central topic for third party politics since the Greenback Party, and arguably the political topic of greatest attention in US history after slavery/civil rights.

US corporate media, the Federal Reserve, and US government do not communicate the facts of an alternative to a debt-based system, despite this history. Given facts of increasing and unpayable federal and private debt, this is a lie of omission. As near as I can tell, J.P. Morgan purchased corporate media in 1917 (23) in order to propagandize the 99%’s support for the Federal Reserve and to enter WW1:

Congressman Oscar Callaway lost his Congressional election for opposing US entry into WW 1. Before he left office, he demanded investigation into JP Morgan & Co for purchasing control over America’s leading 25 newspapers in order to propagandize US public opinion in favor of his corporate and banking interests, including profits from US participation in the war. Mr. Callaway alleged he had the evidence to prove Morgan associates were working as editors to select and edit articles, with the press receiving monthly payments for their allegiance to Morgan.

One of the leading papers, The New York Times, printed the story (24) of Congressman Callaway’s call for investigation from Washington, D.C., but the editor chose a curious obfuscating headline:


Moore Asks Inquiry Into Charges

on Preparedness Campaign.

And you should know (25) that professional US economics journals have half their editorial boards as current Federal Reserve employees, with most of the rest being past Federal Reserve employees. This control makes editorial choices to omit research critical of the Federal Reserve and fractional reserve lending much easier.

But wait, there’s more.

We have verified history of official government propaganda having infiltrated corporate media. The Church Senate Committee hearings had the cooperation of CIA Director William Colby’s testimony that over 400 CIA operatives were controlling US corporate media (26) reporting on specific issues of national interest in what they called Operation Mockingbird. This stunning testimony was then confirmed by Pulitzer Prize reporter Carl Bernstein’s research (27) and reporting. Of course, corporate media refused to publish Bernstein’s article and it became the cover-story for Rolling Stone. For a 13-minute video that includes the President of CBS admitting that their news agency accepted and communicated CIA-generated and planted stories, the CIA Director admitting to the Senate that this is true, examples of widely-reported “news” stories that were total lies from the CIA to foment war support from the US public, watch here (28).

Related corporate reporting history is summarized and documented in this brief article, “The news media at war.”(29)

But what connection could there be between the CIA’s interest in favorable news reporting to corporate media’s non-reporting of monetary and credit reform? That’s the type of real-world critical thinking you have to do your own cost-benefit analysis whether its worth your attention to explore. We will have a connection later to CIA interest to control corporate media with war reporting.

Corporate media won’t report the following polling data, but the American public have noticed something is very wrong with their “news” both as reported by government and regular media.

In 2010, only one in five Americans reported trust and satisfaction with their government (30) (and here [31]). In 2014, Gallup reported (32) Americans’ confidence in Congress at the historic low of 7%, while 7% reported their confidence level at “none” and half as “very little.”

According to a 2007 poll by the Pew Research Center (33), the majority of the American public see the US major media news organizations as politically biased, inaccurate, and uncaring. Among those who use the Internet, two-thirds report that major media news do not care about the people they report on, 59% say the news is inaccurate, 64% see bias, and 53% summarize their view on major media news as, “failing to stand up for America.” In their 2009 poll (34), “just 29% of Americans say that news organizations generally get the facts straight, while 63% say that news stories are often inaccurate.” Gallup’s 2014 poll (35) recorded the lowest ever US public confidence in accurate news reporting from corporate media’s television news: 18%.

A June 2010 Rasmussen poll (36) found 66% of voters “angry” at the media, with 33% “very angry.” Rasmussen also found 70% “angry” at current federal government policies. The most current Gallup poll in 2012 (37) shows Americans’ distrust at an all-time high in the reporting from “mass media — such as newspapers, TV, and radio”: 60% have either “not very much” trust and confidence or “none at all” to “reporting the news fully, accurately, and fairly.”

Our experience as lobbyists with RESULTS is in agreement that US corporate media would severely distort reporting on ending poverty and microcredit. For example, we were a leading voice for the creation of the 1990 World Summit for Children, the largest meeting of heads of state in world history. The purpose of the Summit was nations’ agreement to end poverty once and for all, forever. The developed nations would fund the work to accomplish the Summit’s goals with just 0.7% of their incomes. This would save a million children’s lives every month, with the history strongly projecting that proven strategies would end poverty everywhere on earth within ten years. And in every historical instance of ending poverty, population growth rates decrease and end the problem of over-population.

Largest meeting of heads of state in world history?!

Saving a million children’s lives EVERY month?!

And the investment is just 0.7% of our income, while reducing population growth rates in every historical case?!

Whoa! That’s front-page news, yes?

The only article I can find in 2011 is representative of the US corporate media coverage: The New York Times covered the Summit in the “Education” section way in the back of the paper, only for that one day as I recall, and only on the last day of the Summit. Corporate media refused invitations from RESULTS and similar organizations for interviews about the Summit, and then ongoingly refused our requests for follow-up reporting when the US reneged on their promises to end poverty. Here’s the headline:



WORLD SUMMIT FOR CHILDREN; World’s Leaders Gather at U.N. for Summit Meeting on Children

By PAUL LEWIS, Special to The New York Times

Published: September 30, 1990

Look at the New York Times front page today and see where their “Education” section is at the left column of their main topics for news. This is a listing of topics by importance:

  1. WORLD
  2. U.S.
  10. HEALTH
  12. ARTS



15. All Blogs

16. Cartoons

17. Classifieds

18. Corrections

19. Crossword / Games

20. Education

Let’s do some analysis on the choice of reporting of the NYT. The article title was, “WORLD SUMMIT FOR CHILDREN; World’s Leaders Gather at U.N. for Summit Meeting on Children”. Along with burying the story after cartoons, corrections, and games, they chose a headline that omits the point of saving millions of lives and that this is the largest meeting of heads of state in the history of planet Earth, not just some ambiguous “leaders.” The article discusses the investment to end poverty only as costing “more money” and lies in omission that it’s less than one percent of US income. It reports that the meeting will cause “headaches” for planners, and traffic jams for everyone in New York City. It then reports the non-story that because such a meeting cost $5 million to create that “some people” might criticize the Summit (we never heard that complaint or could imagine anyone making it). The “reporting” ends by repeating that this “meeting” of a “long list of goals” will cost more money than is currently being spent.

This choice of reporting was AFTER our continuous communications with the NYT to report on the facts. For an example of what we offered NYT for factual understanding, preview the assignment we’ll do that’s also one of my published articles, Economics of ending poverty: 0.7% of GNI is all it takes. An example:

The total deaths from poverty in the last 15 years is conservatively greater than from all wars, revolutions, murders, accidents, and suicides in the 20th century.[11] In the past 20 years, the total deaths from poverty probably eclipse all the above categories of death in all known human history.[12] Make sure you get this: in your lifetime of a high school Senior, human beings have allowed other people in poverty, mostly helpless children under the age of five, to die before our eyes in numbers greater than all of the catastrophic events in our history books.

Ask and answer for yourself: is this NYT article on the World Summit for Children they buried deep in the paper, and only reported on the day of the event, an example of professional and comprehensive reporting on our most important issues? Is saving a million children’s lives every month such a non-story, or was NYT reporting on this issue intentionally manipulated to under-inform, dis-inform, and keep this topic away from the attention of Americans? Indeed, is this an “in your face” lie of omission to both distract from the main facts and place it after the comics?

If the second explanation makes more sense to you, does this propaganda continue to our present because the NYT continues its non-reporting of our power to save a million children’s lives every month, and that since the 1990 Summit more people have died from preventable poverty than all the wars and categories of violent death in all recorded human history?

I think that 95% of Americans would prefer to understand the facts of how we can end poverty with less than one percent of our income, and for less than ten percent of what we spend on our military every year. The polling data (38) included in my article on ending poverty affirm this interest of the American public.

But wait: that was just the first of two UN Summits for heads of state we worked with.

RESULTS led the work for the 1997 Microcredit Summit, also for heads of state. Microcredit is so effective at ending poverty (and it’s profitable) it was the topic of the 2006 Nobel Peace Prize. When we received identical US corporate media coverage (with lies and reneged promises from political leadership), I shifted my lobbying for the end of poverty to economic research in order to “follow the money.” That’s led to my current use of my “hobby time” (I work as a teacher, remember) to research, write, and lobby for monetary and financial reforms with principal projects of national monetary reform (39) and state-owned banks (40) for at-cost credit.

Btw, here’s how the New York Times is covering what’s happening as a “current event” as I write: the Occupy Wall Street event that directly concerns monetary and financial reforms:

6.2 pdf

And here (41) is a 14-second video showing the police apparently leading the protesters onto the bridge. This video is prima facie evidence that the police may be guilty of entrapment. So it appears that the NYT is not merely correcting an error they discovered. Indeed, any correction should have reported on the possibility of entrapment. The NYT seems to be choosing to lie in omission in order to demonize this protest, don’t you think?

Remember: don’t believe anything. I’m asking you to develop the critical thinking skills to evaluate factual claims for yourself. I’m telling you what you already know: res ipsa loquitur, roughly that facts speak for themselves. Please don’t accept my words any more than you’d accept the word of a member of Congress, a US President, or US corporate media reporting.

Following is my “top ten” list (42) of historical Americans who understood the mechanics of money and debt; with excerpts of what each communicated. I’ve chosen these excerpts for their power when each is considered, their overall teaching application to demonstrate credibility of this idea, and, well, the 99% seem to like “top ten” things.

Again, the length of this section is my choice to provide multiple credible sources to one convenient place. All bold-type is my added emphasis.

“At first blush, a man is not capable of reporting truth; he must be drenched and saturated with it first.”  – Henry David Thoreau, I to myself: an annotated selection from the journal of Henry D. Thoreau, 1837.

6. Who in American history have argued for monetary/credit reform? To start: Thomas Edison and Thomas Jefferson

Let’s discuss some history of past “current events,” then I’ll let you go to work with your research on an economic issue of interest to you. You’ll  determine for yourself the key facts, what they mean, and what policy we should adopt as a nation.

We need to understand history or we literally don’t know anything. As you know from everyday life encounters with enjoying relationships with friends, following your favorite sports teams, and even playing video games: it’s only from studying history (what happened) that we’re informed and empowered to act intelligently in the present.

Let’s make sure we understand the power of knowing history: We enjoy our friends by discussing recent history of events, interpret what they mean, and create interesting strategies to move forward in our various life projects. For sports we look at statistics (historical performance) to scout our opponents and understand important aspects of performing well in the present and future. In video games, we learn from failures and successes how to move forward. Indeed, with mastery of history we become increasingly competent in our actions in the present.

Therefore, to understand US current events, part of our strategy MUST include an understanding of key past current events.

Although the following history of some of the US’ most important “current events” is non-controversial for factual accuracy as far as I know, most Americans have received a “Disney-like” view of them. I credit the US’ best-known professional historian, Howard Zinn, for his enormous contribution to counter corporate media and corporate textbook’s Disneyfication of US history in his bestselling book, A people’s history of the United States. Mr. Zinn’s book is usual reading in college and AP US History courses (and increasing numbers of regular high school US History and middle schools with an adapted version), was the 1980 runner-up for the US “National Book Award”, and has sold over one million copies. It was last updated in 2005.

Therefore, the following history that may be new to you is essential to at least counter the lies of omission and/or romanticized view you’ve already received, and may even be the far more accurate history. You’re welcome to research any of the following for extra credit, of course.

“The only thing new in the world is the history you don’t know.”  – President Harry Truman, Plain Speaking: An Oral Biography of Harry S. Truman (1974) by Merle Miller, pg. 26.

Historically, we know that concern for abuse in US domestic policy has been justified. For nearly one hundred years, our government chose not to enforce Constitutional Amendments for the protection of African Americans. Lawful political dissent against US participation in WW I was crushed under the Espionage Act of 1917 (43) and the Sedition Act of 1918. American citizens of Japanese ancestry had their Constitutional rights rescinded in WW II when they were ordered to internment camps (44).

In US Foreign Policy, the US removed Native Americans from treatied lands (45) in apparent prima facie violations of over 300 treaties. When Native Americans argued for their treatied rights and won in the Supreme Court Case Worcester v. Georgia (46) in 1832, US President Andrew Jackson refused the decision. The resultant forced military removals in the “Trail of Tears” (47) killed  ~4,000; most from the forced march during winter without provision of adequate supplies to prevent death by freezing. The legal classification of this act is murder. Because both political parties and most media supported the removal, this treaty violation and mass-murder was possible. We’ll consider in the next section Jackson’s killing-ability when he considered his version of the Federal Reserve an enemy of the state.

Please recall the California State Framework’s warning of the fragility of democratic institutions.

Thomas Edison (1847-1931) held over 1,000 US patents for his inventions and is considered among the most brilliant minds in American history. Edison understood the engineering of our monetary system and actively spoke for monetary reform. These seven paragraphs are from an interview with the New York Times in 1921 (48) from a publicity tour Edison took with his friend and fellow inventor Henry Ford to discuss monetary reform:

“That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt. Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.

But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good. The difference between the bond and the bill is that the bond lets the money brokers collect twice the amount of the bond and an additional 20 per cent, whereas the currency pays nobody but those who directly contribute to Muscle Shoals in some useful way.

… if the Government issues currency, it provides itself with enough money to increase the national wealth at Muscles Shoals without disturbing the business of the rest of the country. And in doing this it increases its income without adding a penny to its debt.

It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay; but one promise fattens the usurer, and the other helps the people. If the currency issued by the Government were no good, then the bonds issued would be no good either. It is a terrible situation when the Government, to increase the national wealth, must go into debt and submit to ruinous interest charges at the hands of men who control the fictitious values of gold.

Look at it another way. If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper. Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency on Muscle Shoals, instead of the bankers receiving the benefit of the people’s credit in interest-bearing bonds?

Certainly there is a complete set of misleading slogans kept on hand for just such outbreaks of common sense among the people. The people are so ignorant of what they think are the intricacies of the money system that they are easily impressed by big words. There would be new shrieks of ‘fiat money,’ and ‘paper money’ and ‘green-backism,’ and all the rest of it – the same old cries with which the people have been shouted down from the beginning.

But maybe we have passed beyond the time when the thoughtful 2 per cent – you know, I gather from my questionnaire that only 2 per cent of the people think,” and Mr. Edison smiled broadly. “Maybe they can’t shout down American thinkers any longer. The only dynamite that works in this country is the dynamite of a sound idea. I think we are getting a sound idea on the money question. The people have an instinct which tells them that something is wrong, and that the wrong somehow centers in money. They have an instinct, also, which tells them when a proposal is made in their interests or against them.”

Thomas Jefferson (1743-1826) was the primary author of the Declaration of Independence, a foundation of American ideals (49). He was a scholar of the Enlightenment, including religious tolerance and freedom. He communicates strong understanding of banks creating credit that cause inflation to devalue everyone’s currency, the gambling of created credit such as we see today in credit default swaps and exotic derivative trading. Note: ME, FE = Memorial Edition, Ford Edition from the University of Virginia archives

“All the perplexities, confusions, and distresses in America arise, not from defects in their constitution or confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation.” – John Adams, letter to Thomas Jefferson (178708-25), The Works of John Adams (I’ve included the only quote I have from Adams here, since it was directed to TJ)

“This institution (privately-owned central banks) is one of the most deadly hostility against the principles of our Constitution…suppose a series of untoward events should occur…an institution like this…in a critical moment might upset (overthrow) the government.” – Thomas Jefferson,December 1803 letter to Treasury Secretary, Albert Gallatin.

“The art and mystery of banks… is established on the principle that ‘private debts are a public blessing.’ That the evidences of those private debts, called bank notes, become active capital, and aliment the whole commerce, manufactures, and agriculture of the United States. Here are a set of people, for instance, who have bestowed on us the great blessing of running in our debt about two hundred millions of dollars, without our knowing who they are, where they are, or what property they have to pay this debt when called on; nay, who have made us so sensible of the blessings of letting them run in our debt, that we have exempted them by law from the repayment of these debts beyond a give proportion (generally estimated at one-third). And to fill up the measure of blessing, instead of paying, they receive an interest on what they owe from those to whom they owe; for all the notes, or evidences of what they owe, which we see in circulation, have been lent to somebody on an interest which is levied again on us through the medium of commerce. And they are so ready still to deal out their liberalities to us, that they are now willing to let themselves run in our debt ninety millions more, on our paying them the same premium of six or eight per cent interest, and on the same legal exemption from the repayment of more than thirty millions of the debt, when it shall be called for.” –Thomas Jefferson to John W. Eppes, 1813. ME 13:420

“Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs.” –Thomas Jefferson to Thomas Cooper, 1814. ME 14:61

The treasury, lacking confidence in the country, delivered itself bound hand and foot to bold and bankrupt adventurers and bankers pretender to be money-holders, whom it could have crushed at any moment. Even the last half-bold, half-timid threat of the treasury, showed at once that these jugglers were at the feet of government. For it never was, and is not, any confidence in their frothy bubbles, but the lack of all other medium (money), which induced…people to take their paper…We are now without any common measure of value of property, and private fortunes are up or down at the will of the worst of our citizens. Yet there is no hope of relief from the legislators who have immediate control over this subject. As little seems to be known of the principles of political economy as if nothing had ever been written or practiced on the subject, or as was known in old times, when the (bankers) had their rulers under the hammer. It is an evil, therefore, which we must make up our minds to meet and to endure as those of hurricanes, earthquakes and other casualties: let us turn over therefore another leaf.” – Thomas Jefferson, October 16, 1815 letter to Gallatin. Letters and Addresses, edit. William Parker, (New York: 1905).

“The system of banking [I] have… ever reprobated. I contemplate it as a blot left in all our Constitutions, which, if not covered, will end in their destruction, which is already hit by the gamblers in corruption, and is sweeping away in its progress the fortunes and morals of our citizens.” –Thomas Jefferson to John Taylor, 1816. ME 15:18

“I sincerely believe… that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.” –Thomas Jefferson to John Taylor, 1816. ME 15:23

“I sincerely believe… that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.” –Thomas Jefferson to John Taylor, 1816. ME 15:23

“Certainly no nation ever before abandoned to the avarice and jugglings of private individuals to regulate according to their own interests, the quantum of circulating medium for the nation — to inflate, by deluges of paper, the nominal prices of property, and then to buy up that property at 1s. in the pound, having first withdrawn the floating medium which might endanger a competition in purchase. Yet this is what has been done, and will be done, unless stayed by the protecting hand of the legislature. The evil has been produced by the error of their sanction of this ruinous machinery of banks; and justice, wisdom, duty, all require that they should interpose and arrest it before the schemes of plunder and spoilation desolate the country.” –Thomas Jefferson to William C. Rives, 1819. ME 15:232


1 The Columbus Dispatch. History network working to retain ratings success. Stelter, B. Dec. 22, 2011

2 Herman, C. Debt-damned economics: learn monetary reform or kiss your assets goodbye. 1 of 2. Examiner.com. July 3, 2011

3 Public Banking Institute to explore for resources, and Herman, C. Public Banking Conference good news: all solutions already here for deficits, debt, full-employment. June 3, 2012.

4 Herman, C. Occupy facts: Federal Reserve CAUSES unpayable debt, unemployment, inflation. washingtonsblog.com. Nov. 2, 2011

5 Herman, C. Debt-damned economics: learn monetary reform or kiss your assets goodbye. 2 of 2. Examiner.com. July 3, 2011

6 Herman, C. Public Banking Conference good news: all solutions already here for deficits, debt, full-employment. June 3, 2013

7 Josheski, D. Infrastructure investment and GDP growth: a meta-regression analysis. Social Science Research Network. Sept. 1, 2008 (among many studies).

8 Herman, C. How an economics teacher presents Occupy’s economic argument, victory. Washingtonsblog.com. Jan. 30, 2012.

9 Herman, C. US Senate: Banksters the new Enron; manipulating markets to add trillions to consumer prices. Examiner.com. Nov. 18, 2009

10 Herman, C. CAFR: UC budget fully funded with one-fifth of one percent of state of CA “investments”. Examiner.com. May 24, 2010

11 Pharmaceutical industry cover-up revealed in New York Times. www.wanttoknow.info

12 Underwood, A. Questions for Dr. Marcia Angell. New York Times. Health. Aug. 12, 2009.

13 Harvard Gazette. New study finds 45,000 deaths annually linked to lack of health coverage. Harvard Science. Cecere, D. Sept. 17, 2009

14 Herman, C. More CRIMINAL fraud: ‘Obamacare’ transfers $100-$300 billion/year from 99% to 1%. Washingtonsblog.com. Nov. 11, 2013

15 Buckminster Fuller Institute for information. Archives stored at Stanford University.

16 The Venus Project: beyond politics poverty and war. Jacque Fresco creator.

17 Wanttoknow.info. New Energy Information Center.

18 Project Syndicate. Did the poor cause the crisis? Johnson, S. Jan. 19, 2011.

19 The Independent. Joseph Stiglitz: It takes more than free trade to end poverty. Feb. 3, 2006.

20 Project Syndicate. The end of the beginning of ending poverty. Stiglitz, J. July 7, 2005.

21 Examiner.com. 3-minute video: US policy causes poverty, terrorism, war to enrich US oligarchs. Herman, C. Sept. 9, 2011.

22 Examiner.com. 2-minute video: Best-selling Chief Economist reveals criminal US foreign policy. Herman, C. April 24, 2011.

23 Herman, C. 1917: J.P. Morgan bought US corporate media to be 1’s lying sack of spin? Examiner.com. Jan. 28, 2012

24 published Feb. 14, 1917

25 Herman, C. “Mainstream” media censors economic solutions, Federal Reserve controls economic journals. Examiner.com. Nov. 30, 2009

26 And other documentation of controlled US media: Examiner.com. Protitution “journalism”: Yup, mainstream media is intentional propaganda. Accept the evidence. Herman, C. Nov. 24, 2009.

27 The CIA and the media: How America’s most powerful news media worked hand in glove with the Central Intelligence Agency and why the Church Committee covered it up. Bernstein, C. Oct. 20, 1977.

28 Sibel Edmond’s Boiling Frogs. CIA News: A brief history of media manipulation by U.S. Intelligence. Sept. 30, 2011: http://www.boilingfrogspost.com/2011/09/30/the-eyeopener-cia-in-the-news-media-2/

29 Architects & Engineers for 9/11 Truth. The news media at war. Hansen, T. June 22, 2010.

30 Pew Research Center. Distrust, Discontent, Anger, and Partisan Rancor. April 18, 2010.

31 Infowars.com. Dissatisfaction with government reaches all time high. Watson, S. Sept. 26, 2011.

32 Gallup. Public faith in Congress falls again, hits historic low. Riffkin, R. June 19, 2014. http://www.gallup.com/poll/171710/public-faith-congress-falls-again-hits-historic-low.aspx

33 Pew Research Center Publications. Internet news audience highly critical of news organizations. Aug. 9, 2007.

34 Pew Research Center. Press accuracy rating hits two decade low. Sept. 13, 2009.

35 CNSNews.com. Gallup: Public confidence in TV news at all-time low. Chapman, M. June 19, 2014. http://cnsnews.com/news/article/michael-w-chapman/gallup-public-confidence-tv-news-all-time-low

36 Rasmussen reports. 66% of voters are angry at the media. June 15, 2010.

37 Gallup Politics. US distrust in media hits new high. Morales, L. Sept., 21, 2012.

38 The end of poverty: economic possibilities for our time. Sachs, J. Facts on international aid.

39 The leading organization is The American Monetary Institute. I was a speaker at two of their conferences.

40 The leading organization is the Public Banking Institute. I initiated lobbying in California for a state-owned bank.

41 Washington’s Blog. Over 700 protesters arrested on Brooklyn Bridge … claim entrapment. Oct. 2, 2011. YouTubevideo: Police Leading #OccupyWallStreet protesters onto the Brooklyn Bridge traffic lane. Oct. 1, 2011: http://www.youtube.com/watch?v=Vz67fULXc-0&feature=player_embedded

42 Herman, C. If government created money instead of debt: America’s brightest historical minds speak. Examiner.com. July 13, 2011

43 In this link, Bestselling author Naomi Wolf ties this history into efforts to revive this law in the present: HuffPost. Espionage Act: How the government can engage in serious aggression against the people of the United States. Dec. 10, 2010: http://www.huffingtonpost.com/naomi-wolf/post_1394_b_795001.html

44 Explore the National Asian American Telecommunications Association’s “Exploring the Japanese American Internment through film & the Internet.

45 Yale Law School. Treaties between the United States and Native Americans. And Honor the Treaties.

46 one of many summaries: eNotes: Supreme Court Drama: Worcester v. Georgia.

47 one of many summaries: About North Georgia. The Trail of Tears.

48 New York Times. Ford sees wealth in Muscle Shoals. Dec. 5, 1921

49 to consider the ideals Americans value, and has attracted people around the world: Herman, C. Core American values in the Declaration of Independence: compare to what we really have. Examiner.com. Sept. 8, 2009

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